End the budget brinksmanship

Members of Congress will face two acute budget problems when they return to Washington next month. Having failed to pass appropriations bills to fund the government, Congress will need to adopt a continuing resolution to avoid a government shutdown on Oct 1. And to avoid any hint of federal default, Congress will also need to raise the debt ceiling. If recent history is any guide, a hyperpartisan fight will lead to a last-minute resolution that skates by these short-term problems but does little or nothing to fix federal government’s larger, long-term budget problems. And so the can will be kicked down the road once again.

The United States cannot afford this budget brinksmanship. The terms of the debate must change — and we’re taking steps to make that happen. The two of us have joined with more than 800 other economists, including a dozen Nobel laureates, to endorse the bipartisan INFORM Act. Championed by a group of young people who appropriately call themselves “ The Can Kicks Back,” this legislation would incorporate two tools into the budgeting process to reveal the full size and intergenerational impact of our country’s fiscal imbalance. The first tool, the fiscal gap, would show how big the nation’s tab is, by calculating the difference between projected spending and revenue over the next 75 years and infinite horizon. The second tool, generational accounting, would show who is going to pay that tab by calculating the difference between lifetime taxes paid and benefits received by each age group.

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This legislation is needed because we are completely shortsighted when it comes to the federal budget. It’s especially tough to take the long view when the near-term news is good. This year alone, revenues are expected to increase more than $350 billion and spending is expected to fall nearly $100 billion, pushing the projected budget deficit below $1 trillion for the first time since 2008. Since August 2010, Washington has achieved roughly $2.7 trillion in deficit reduction over the next decade, plus additional savings totaling $1.2 trillion if the “sequestration” spending cuts remain in place. This may all seem like good news, but as those outside of Washington know, life goes on beyond the 10-year budget projections offered by the Congressional Budget Office. And in that context, the deficit reduction to date has ignored the true drivers of our national debt.

In fact, the longer-term picture is devastating. According to the Committee for a Responsible Federal Budget, by 2026, we will return to $1 trillion annual deficits and the federal debt will be headed toward unprecedented levels. By 2031, mandatory spending — Medicare, interest payments and other spending not controlled by Congress through the appropriations process — will consume ALL federal revenue. Think about that: Every penny collected in taxes will have been allocated before Congress even gavels into session.

In 2033, the Social Security trust fund will run dry and incoming payroll taxes will cover only 77 cents on every dollar promised to beneficiaries. In the same year, interest payments alone will total $1.8 trillion! Meanwhile, critical investments ranging from education to infrastructure will be squeezed ever smaller.

Any reasonable assessment of our budget problem would conclude that the real problem is not where we are today; it’s where we are going.

Yet Washington has focused largely on the here and now: Politicians have raised new revenue from top earners without reforming the broken Tax Code through which it is collected, and they have cut spending on important programs such as Head Start without addressing the part of the budget for which real growth is projected to occur — above all, health care.

Still, some want to declare victory on the debt and move on. Doing so would be both fiscally and morally wrong because we know, as a matter of fact, that the bill we are leaving the next generation will be beyond its capacity to pay and will lead to a lower standard of living.

The INFORM Act is our way of saying “enough.” While there is no perfect measure of fiscal sustainability and generational equity, the information provided by the INFORM Act can serve a critical role by refocusing Washington on America’s long-term crisis. It is time for Republicans and Democrats alike to face the facts, rather than kick the can.

CORRECTION: An earlier version of this opinion piece misstated spending projections.

James Carter, a former associate director of the National Economic Council under President George W. Bush, served on the staff of the U.S. Senate Budget Committee. Paul Weinstein Jr., director of the Public Management program at Johns Hopkins University, was chief of staff of President Bill Clinton’s White House Domestic Policy Council and served as senior adviser to the National Commission on Fiscal Responsibility and Reform.